William Hill Italian job not a priority at the moment 03/07/2008

Jake Pollard

William Hill denied the sale of William Hill Codere Italia (WHCI), its Italian joint venture with Spanish firm Grupo Codere, to Intralot Italia, the Greek monopoly operator’s Italian subsidiary, was a backwards step for the firm.

Group finance director Simon Lane said the move was merely a result of William Hill re-evaluating its focus and strategy across the group, notably its online gaming and betting operations. “Italy is an attractive market but the issues of scale and cost had to be addressed. We only secured 57 licences, which gave us nothing like the footprint that we needed to sustain a national presence there,” Lane said.

Lane said the cost of pushing the number of outlets up to 200 could reach 200m, with the licences coming up for renewal in the next three to four years. “It represents a sizeable bet,” Lane commented, “the regulatory risk means it is difficult to make valuable acquisitions and we are looking to focus on how we use our capital and resources. So the Italian venture was not top of our priorities at this point in time.”

Lane added that he was not worried about ‘leaving the field open to the competition’. He said: “Italy is a good market but it’s about the right time and opportunity and companies such as Lottonatica and Snai have real scale and presence there. At the moment we have other priorities and the partnership with Codere is still there, we will make sure it works in Spain before we spread ourselves too quickly.”      

The gross consideration for WHCI was 5.5m, and will be shared equally between the two shareholders. The sale will result in a write off of around £1m in William Hill’s 2008 interim results and include the internet betting licences secured in the 2006 tender, the company said it was still considering its options with regard to an internet offering in Italy.

Hill’s statement said “the number of retail betting licences won by WHCI was insufficient in scale to provide an attractive long term return”, while “options to grow within Italy through the acquisition of either existing or new licences were explored, but the cost of acquisitions within the existing regulatory framework in Italy made further investment unattractive”. 

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Posted: 03/07/2008